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Communist rule in Hungary ended in 1989 when the Hungarian Communist Party voluntarily gave up power under pressure for political reform. Under communist rule Hungary had been the first Eastern European country to gain some economic freedoms. The Third Hungarian Republic was declared on 23 October 1989 and free elections were held in 1990, marking the start of democratic government in the country. Hungary quickly developed a strong party system and had an orderly transfer of power between the centre-right and centre-left. The key aims of the Hungarian government were to develop a more open, liberal economy and to forge closer links with western Europe. A major step forward was achieved in 1999, when Hungary became a member of the North Atlantic Treaty Organisation (NATO). This was followed by EU membership in 2004. However, the introduction of controversial laws since 2010 and even a new constitution on 1 January 2012 has sparked concerns both in Hungary and the EU in general about the curtailing of the freedom of speech, judiciary independence and other democratic rights.
Hungary is a representative parliamentary republic. The Prime Minster is the head of the executive and sponsors legislation. The current government is led by Viktor Orbán of the conservative Fidesz-Hungarian Civic Union party, which was elected in April 2010 with the biggest victory at a Hungarian general election since the fall of communism twenty years ago. Orbán was re-elected in April 2014, but with a fall of 8.2 per cent in votes compared to the 2010 election. There was concern when the far-right party Jobbik, which has strong anti-semitic and anti-Roma policies, secured almost 21 per cent of the vote – 5 per cent up from the last election.
The President is elected by the legislature for a term of five years and has a mainly ceremonial role. President Pal Schmitt resigned in April 2012 after it was revealed that the content of his PhD thesis had been heavily plagiarised and he was stripped of his doctoral title. In May 2012 the Parliament elected MEP Janos Ader as President. Ader was a founding member of Orbán’s Fidesz party, and the Hungarian socialist members of Parliament boycotted his election due to their concerns that the right-wing party was becoming over-dominant. Ader had been instrumental in the drafting of the 2012 Hungarian constitution which was heavily criticised. Hungary has a single chamber Parliament (Országgyűlés) with 386 members which has the power to initiate legislation.
Hungary: Key Facts
• Capital: Budapest
• Population: 10 million (2014)
• % of total EU population: 1.9%
• Official languages: Hungarian
• Year of EU accession: 2004
• Currency: Hungarian Forint (HUF)
• Schengen Area member: Yes, since 2007
• Seats in European Parliament: 21
Hungary and the EU
Membership of the EU was an important political goal for Hungary. Having moved away from the communist system, it made a strong effort to distance itself from Eastern Europe and to become more integrated with the West. In particular, it made efforts to identify itself as a central European country – alongside Austria and Germany – rather than as part of the communist sphere of influence. In December 2007 Hungary became part of the Schengen zone enabling free movement across national borders. Hungary took over the rotating EU Council Presidency on 1 January 2011.
When it joined the EU in 2004, Hungary did not immediately adopt the Euro; it is currently trying to meet the convergence criteria, but the country was hit particularly badly by the global financial crisis and October 2008 saw the value of its currency, the forint, plummet. The International Monetary Fund (IMF), the EU and the World Bank granted Hungary a $25 billion (£17bn) rescue package in 2008.
In 2012, the introduction of the new Hungarian Constitution caused the European Commission to take legal action against Hungary for infringing EU law, and sparked an on-going war of words between Prime Minister Viktor Orbán and the EU. The new laws included ones which undermined the independence of the Hungarian judiciary and press, manipulated electoral rules in the government party’s favour, and curtailed the independence of the Hungarian central bank. Under pressure from the Commission, the latter law was amended and negotiations over a new €15-20 billion (£11-15bn) bailout package, requested by Hungary in November 2011, were able to recommence but did not lead to a further bailout programme. In addition, the EU has suspended €495 million (£363mn) of funds due to Hungary in 2013 over concern about the government’s excessive budget deficit which continues to rise. This represented the EU’s first action against a country contravening its budget deficit rules. In March 2015, however, the Commission approved investments of over €152 million from the European Regional Development Fund to modernise the Hungarian road infrastructure. In total, approximately €25 billion (£18bn) in Cohesion Policy funding was spent in Hungary between 2007 and 2013. For the 2014-2020 period, Hungary will receive €21.9 billion (£16bn) in Cohesion Policy funding.
Convergence Criteria: the rules set down in the Maastricht Treaty that all countries have to meet in order to qualify for membership of the Euro.
PPS: GDP per head is expressed in Purchasing Power Standards (PPS) to eliminate the differences in price levels between countries allowing meaningful volume comparisons of GDP between countries.